Working the numbers and confused

[bentleytech1]

I have been considering expediting, and as I go thru the numbers and read daily posts, I'm confused. the numbers work. I used the spread sheet in EO and it makes a lot of sense.
I notice people saying that you can't make it unless your retired with a retirement income, or have a spouse at home making big money. If that's true, then why are there so many fleet owners? With an investment in truck, repairs, maint., and paying a driver some split (60/40 or 40/60) how do they make any money? If they had that kind of money invested and only get a 2%-5% return, wouldn't they be better off just investing it at 8%-10% with less risk somewhere else?
Also, if there are fleet owners making money, why would it be so hard for a O/O to make money as he gets to keep the whole shot of income, and has greater control over keeping his truck in good shape?
I've been reading everything I can here on EO and have really learned a lot from all of your experiences. THANKS!!

 

[DannyD]

If I'm not mistaken the ones who need the 2nd income (or spartan lifestyle) tend to be the cargo van drivers. Fleet owners tend to own straight trucks or bigger.

There is not enough $$$ in a cargo van to support 2 entities generally. Husband/wife, father/son or something like that can do ok, but 2 seperate families is pretty tough.

I've never driven a straight truck, so not real sure about the finances of one. From what I've gathered on here though, a good owner & good driver/team can both do ok.

 

[bentleytech1]

Thanks DannyD. I'm looking at Solo with a CV as the initial investment is lower, and there just seems to be less BS, logging, driving hours, reset time (34hrs) and the like. I just can't believe that there are that many people doing this just to roll money over, so there must be at least a little money to be made. I understand that some weeks are up, and some weeks are down, but overall at the end of the year, most people doing this and paying attention to running their business, must be making a living.
Really looking forward to other comments as well

 

[LDB]

It costs me about 37.5 cents per mile to operate my van, including payment, QC, insurance etc. etc. and depending of course on how many miles factored into the fixed costs. Round that off to 40 cents a mile, work for a company that pays 70 cents a mile only on loaded miles (I don't) and you can see how a van won't support two (or even three) separate bank accounts. Work for a company paying better, as an owner so all funds go to one account, and a van can make a respectable amount of money.

Do a lot of research, a lot. That is a primary key to making it or not in this industry. Good luck.

 

[bentleytech1]

Leo, thanks for your posting and your wisdom. Exactly the reason I have been reading EO and then finally asking the question. When I work the numbers for initial investment, tires, permits, fuel, and repairs, van seems to be a good way to start. If it works, then move up to something bigger if everything works out. Using a used van, w/ low miles, add the extras needed for reasonable comfort, and then manage as carefully as I can.

Also, can someone explain the logic ($ and cents ) of sitting for two days versus deadheading say 200 miles and picking up a load, with perhaps ending up back in heavier freight lanes?? I would think (as a Newbie mind you) that moving is far better than sitting, but then.....that's why I'm asking the question.

 

[OntarioVanMan]

Let me ask you a question back...

Would you not invest say $15 in fuel for a chance to make 3-500 dollars? To move 200 miles if you feel the need is pennies per mile...

 

[bentleytech1]

Thanks OVM!! The answer is YES!! I would trade $15 all day long for $150-$300!!! That's a 10x to 20x increase. Seems like a "no-brainer" to me. Just had to ask the question, as I see in posts a lot of rigs that sit for ??? Unless I have something very wrong, if it isn't moving loaded, it isn't making money, and some times you have to invest a little to make any.

 

[jjoerger]

Leo, thanks for your posting and your wisdom. Exactly the reason I have been reading EO and then finally asking the question. When I work the numbers for initial investment, tires, permits, fuel, and repairs, van seems to be a good way to start. If it works, then move up to something bigger if everything works out. Using a used van, w/ low miles, add the extras needed for reasonable comfort, and then manage as carefully as I can.

Also, can someone explain the logic ($ and cents ) of sitting for two days versus deadheading say 200 miles and picking up a load, with perhaps ending up back in heavier freight lanes?? I would think (as a Newbie mind you) that moving is far better than sitting, but then.....that's why I'm asking the question.

One of the reasons we sit is because you never know where or when the next load will pick up. If you move from Milwaukee to Chicago on your own money and then get a load picking up in Milwaukee you just wasted your time and money deadheading to Chicago. Especially if your carrier authorized you to go to Milwaukee (with DH pay) and you chose to go to Chicago. It's always a guess on where you should be. If you happen to get a load to a totally dead area then it is better to move to a place where you can get loaded. Learning where your carrier is busy and needs your truck is part of the learning process.

 

[OntarioVanMan]

There are those you would chose to throw at you the extra cost of maintenance on the van....I say it is the cost of doing business...

With enough experience with your chosen carrier you'll just know when to move or stand still.....it is more an instinct.

 

[bentleytech1]

OVM, I'd say your a professional who understands the business part of the business. Thank you for your WISDOM. Now back to the original question. If we use the $0.40 per mile as cost, and $0.70 per mile as income, and use the "posted average of 1800 miles per week , then it works out to something like $0.30 x 1800miles avg. x 50 weeks = $27,000 per year or $540 per week. Is that reasonable? It seems low to me.

 

[moose]

Why dont'ch'Yha drive for an owner first ?

 

[bentleytech1]

Mr. Moose....I have considered that. I have however traveled significantly in the the past for my job (two or three weeks at a time) so travel is not the issue. (I'm 55 so not exactly wet behind the ears) Like I said, I have considered it, but when I look at the up front investment, and the return as a O/O, just seems to make more sense to me. What am I missing??

Thanks to everyone for responding and posting...This is part of my education before I have to take the "final exam" and get into Expediting.

 

[OntarioVanMan]

OVM, I'd say your a professional who understands the business part of the business. Thank you for your WISDOM. Now back to the original question. If we use the $0.40 per mile as cost, and $0.70 per mile as income, and use the "posted average of 1800 miles per week , then it works out to something like $0.30 x 1800miles avg. x 50 weeks = $27,000 per year or $540 per week. Is that reasonable? It seems low to me.

Remember that .40 you are using includes most operating costs..that $27,000 is in your pocket..and with a good accountant you'll probably be tax free..

That 27,000 is more of a guideline then a fact...so you should not dwell on it too much...

 

[arkjarhead]

With enough experience with your chosen carrier you'll just know when to move or stand still.....it is more an instinct.

It's like Kenny Rogers said " You gotta know when to hold em and you gotta know when to fold em."

 

[OntarioVanMan]

It's like Kenny Rogers said " You gotta know when to hold em and you gotta know when to fold em."

Exactly..My Arkansilian friend...

 

[bentleytech1]

LDB....or anyone else...you mentioned operating costs. I'm reasonably talented and have most required hand tools so expect to do my own basic mant. like oil changes, tranny fluid changes, rear end fluid changes, filter changes and tire rotations. Does that lower the $0.40 you mentined? Do you do your own maint??

 

[OntarioVanMan]

LDB....or anyone else...you mentioned operating costs. I'm reasonably talented and have most required hand tools so expect to do my own basic mant. like oil changes, tranny fluid changes, rear end fluid changes, filter changes and tire rotations. Does that lower the $0.40 you mentined? Do you do your own maint??

LDB is an old fart..as old as dirt itself...*lol*

YES the work you do will reduce that operating number greatly..

Reduced labor, reduced tax on the labor,
order your own parts at less or equal value
and again reduced tax on them parts...

 

[xiggi]

Keep in mind just as many or maybe even more cv drivers are getting 800 - 1000 miles per week as there are doing 1800. Someone mentioned driving somewhere that pays a higher per mile rate. While that may sound good on the surface it is not always the best route. Would you rather make .80 per mile with an average 40% deadhead or .70 pm with an average 10% dh?

I would venture to guess the majority of cv drivers do not even average 1400 miles per week when figured over 52 weeks, especially in their first year. Unless you have money to blow you might reconsider driving for an owner for 6 months first.

 

[bentleytech1]

Ok...As a newbie, I'm ready and willing to listen to someone smarter and more experienced than myself. What is the significant "up side" of driving for someone else?? Aren't all of the same factors in play except for worrying about truck expense?? What I mean is, does it change the amount of available or driven miles?? What am I missing?? The truck owner/fleet owner has to make money too, so what is the advantages??

 

[xiggi]

Ok...As a newbie, I'm ready and willing to listen to someone smarter and more experienced than myself.
What is the significant "up side" of driving for someone else?? Aren't all of the same factors in play except for worrying about truck expense?? What I mean is, does it change the amount of available or driven miles?? What am I missing?? The truck owner/fleet owner has to make money too, so what is the
advantages??

Some off the top of my head.

Learn the real miles at that carrier.
Learn if you can handle living out of a van.
Learn how expensive living on the road is.
Learn if you can go two or three days without a shower at times.
Learn where to go and not to go.
Learn a carrier you will not work for.
All without the investment of a vehicle.